Moving to the cloud could cost businesses more than it saves them

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Over the past decade, cloud adoption has become the rule, not the exception. And yet, many companies that have embraced the cloud are feeling the heavy burden of soaring expenses. In other words, using the cloud may cost many businesses more than they actually save.

Despite this, 69% of enterprises globally have accelerated their migration to cloud computing in the past six months, and end-user spending on public cloud services globally is expected to reach nearly $482 billion. dollars by the end of this year. This explosion in cloud spending is often based on the assumption that a company's massive investment in the cloud today will ultimately make IT a more economical business in the future.< /em>

The market is down, companies are looking to cut costs, and many are reassessing their cloud spend. But reliance on the cloud is so vital to business continuity today that many organizations are reluctant to touch their often-bloated cloud budgets, even though they know there's fat to cut. This includes startups with the huge expense of excessive cloud usage, but lack of leadership on where to make cuts.

Here are some tips for businesses to get a better idea of ​​their cloud-related costs and ultimately reduce unnecessary spending.

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register here Understand basic cloud costs — and waste

The majority of cloud-related costs can be broken down into three main components: service, usage, and unit price, all of which can lead to losses if mismanaged.

Service refers to the cloud service provider an organization uses for a given function (i.e. AWS, Microsoft Azure, Google Cloud). It also encompasses the overall technical specifications of the service, including instance family, instance size, processor, and operating system. "Compute" and "storage" are two types of services that are responsible for significant costs. It's difficult to change service decisions once cloud usage is underway, so organizations need to have a deep understanding of this component from the get-go.

Usage considers the extent to which a given organization actually uses and implements the chosen service. This includes the volume of the service used, the amount of data regularly transferred across cloud platforms, and the efficiency of "scaling". Unnecessary costs can arise when instance efficiency is not maximized - you pay for the full instance even if you are not fully utilizing it - as well as when unused "zombie infrastructure" is not controlled.

Unit Price refers to the amount you pay for using the Service. Major service providers such as AWS have a standard unit price on demand, but also offer lifelines such as savings plans, committed use discounts, and corporate discounts. All of these reservations can be negotiated with cloud service providers and reduce cloud overhead.

Manage the cost of cloud

At its core, cloud cost management boils down to a three-pronged methodology: visualization, optimization, and monitoring.

Often, companies adopt cloud capabilities simply for the sake of “digital transformation,” and...